The new Credit Card Reform Act is supposed to protect consumers against high fees, surprise hikes in interest rates and abusive billing practices.

The law passed in May and is not set to take effect until February. But with the holiday shopping season just weeks away, some lawmakers on Capitol Hill are pushing to move up the start date. They complain that credit card companies have been taking advantage of the lag time: raising interest rates, slashing credit limits and switching customers from fixed-rate to variable-rate cards.

The law will prevent banks from arbitrarily changing the interest rate on a customer's existing balance. It will also bar banks from charging interest on debt that a consumer has paid off on time. Last spring, bankers told Congress they needed time to reprogram computers and get ready for all the new rules.

But now, Barney Frank, chairman of the House Financial Services Committee, wants the new law to take effect on Dec. 1, rather than waiting until early 2010. "Too many in the banking system seem to think they can return to the thrilling days of yesteryear when the lone rangers will ride again unhindered by any kind of regulation."

One Credit Card Customer's Story

Janet Thompson of Chevy Chase, Md., was happy to hear about the legislators' efforts to move up the effective date of the law. She got letters recently from two of her credit card companies. The first bank doubled her interest rate. The second did the same — and when she argued the rate back down, the company slashed her credit limit from $7,000 to $500.

"They're taking advantage and they have made all sorts of money during this time by arbitrarily raising [the interest rate]. We always pay early. We always pay more. You know, we'd like to pay it all off — and we used to do that every year when I was working, but I lost my job," Thompson said.

Thompson doesn't want to close her credit accounts because that would ding her credit score. She and her husband are now retirees carrying two mortgages. They're frustrated with the way they say their banks are treating them.

Industry Advocates And Policy Experts Have It Out

The scenario Thompson describes is exactly why banks are changing rates, according to Scott Talbot of the Financial Services Roundtable. "We are in a recession, and there is a greater increased risk that a customer won't pay their credit card that's spread across the board. So even some customers who haven't done anything wrong, or not missed a payment or not been late, are seeing an increase in their interest rate or decrease in their credit line simply because of the general increased riskiness in our current economy."

Talbot says Dec. 1 is too soon to put that much regulation into action.

But Nick Bourke of the Safe Credit Cards Project at the Pew Charitable Trusts disagrees. "What makes sense is to stop repricing outstanding balances as quickly as possible. Banks can stop doing that right away."

Bourke says some provisions of the law have gone, and should go, into effect as soon as possible to protect consumers. But other parts, like a rule that fees should be "reasonable," need more time, he says. It's going to be up to the Federal Reserve to figure out what terms like "reasonable" actually mean.

"If the Fed doesn't have time to create really strong rules, then I think ultimately consumers will be hurt by that," Bourke says.

Still, the House Financial Services Committee plans to take up the legislation as early as this week. Frank says he is eager to move well before holiday shoppers hit the malls with their plastic.